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tv   Taking Stock With Pimm Fox  Bloomberg  February 13, 2014 9:00pm-10:01pm EST

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>> this is taking stock. posted a profit of $2 billion. that exceeded analyst estimates. the banker is here with the chief executive to give us more details. betty? wax great to see you in the studio. strong quarter. you increased your dividend, $1
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billion share buyback. results, and yet you have had to announce a reduction in your workforce. what happened? >> we got to manage the efficiency and productivity of our company. we spent a lot of time moving people to lower-cost locations. tennessee and other locations across the united states. we have a wonderful relationship , so we are moving people out of cities into the lower-cost cities and some offshore as well, so when you do that you bring the first wave, keeping the older people in their jobs until we're ready to make a smooth transition. the of that is dealing with dual jobs in parallel. in addition we are looking to
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empower our people more so they don't have eight or nine levels the organization. we are going to look at control. to make sure our employees are empowered and don't have many places to go to get a decision, because that's what our clients want. they want an empowered culture. that's where we have been, and we need to restore that and make sure they can get a decision from the person they first come in contact with at aig. >> when you talk about the layering, which units do you see that happening the most? acrossre seeing this almost the entire 60,000 employee base. we are looking across the company. we are asking people to give some thought to how many approvals do you need on anything, and we are no more than five. peoplehave to go to five
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to get something excited, it is too much. when people who are product people, functional fence people or technology people and direct bosses, it's getting too much. we as a company want to get to the point where we have a lot of authority at the local level and very little layers above that. just a thought of how do we improve the decision-making environment. >> you have the share buy-back program. is that because there is nothing out there for you to really put your cash to work? >> well, right now there's nothing there this week but it also says we have stress-tested the company to the best of our ability. we're looking at can we handle a significant downturn in the economy, a stress event, if you will. when we look at all that we say we've had a very good not only quarter but we've had a very good year, so we're looking at the amount of cash we have for contingency and we still have
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excess cash. so for now we're comfortable. we want to be able to continually on a routine basis provide opportunities for buybacks and dividends. >> but you are saying right now there are no acquisitions you foresee bringing into the fold of a.i.g.? >> we are constantly looking at acquisitions and looking at if we did how to fund or finance that. so for now we see nothing on the horizon of stress testing at this particular period of time of not being able to continue the normal flow of buybacks to shareholders. >> do you find it hampers your return being labeled a systemically important institution? >> it will have an effect over time depending on what the regulations are. right now we're not concerned about that. we're concerned about running our businesses the right way. once our businesses come out
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we'll take a look at what's required and we may have a new normal. i don't know that i can say we will or won't but what's important is we run this company prudently now and see what the regulators want down the road. >> speaking of regulators, janet yellen made her first public remarks this week. don't know if you were able to watch her five plus hours of testimony on the hill. >> no, i was a little bit busy. >> but the comments about too big too fail, this is what wilbur ross said -- >> on the regulatory side the big complaint people have is with the consumer protection bureau. but as i understand it, while it's housed at the federal reserve, the federal reserve really has no control over it. >> do you agree it's that weak? >> i think wilbur is talking
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about a small piece of the regulatory environment. the federal reserve has enormous capabilities, has enormous breadth of responsibility and they will execute that. i think what janet yellen said which is good is that she recognizes that the banks that they're regulating, under the collins amendment, it's important to understand that banks need to be regulated one way and we need to think about the way we regulate insurance companies and regulate in a slightly different way. that recognition is important for us and quite frankly as i've said all along, the federal reserve, working with the industry over time with come up with the right model that they can speak for all of us in the insurance companies to say that our holding companies of the insurance companies, that those are in aggregate running soundly
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and it won't bring down the financial system. >> are you more or less confident or about the same, seeing her testimony? do you feel comfortable with her as now the fed chair? >> i feel comfortable that she sees the issues. we'll see how she is as -- look, when you move into the chairman role and you got everybody looking at you and taking shots at you -- >> as you know. >> as i know. >> very well. >> i think it's a question of her leadership and ability to go through those kinds of challenges and stay focuses on getting the right things done. >> were you surprised that berkshire hathaway is being considered a systemically important institution? >> the last time i looked i thought geico was an insurance company. >> i think it is. >> good point. so if you look at -- >> but systemically important?
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>> if you look at the amount of reinsurance that is written, if the reinsurance companies are not able to live up to their contracts and guarantees, there are some exposures he has taken off that are very large. if at some point they can't live up to the insurance that they're contracted for, that could affect a.i.g. if it affects a.i.g. and we don't have enough reserves -- we did a very big deal with them a couple years ago on asbestos. if they can't deliver, we're going to have to put up the money. if it causes a backlash to other insurers, all of a sudden it's going to cripple a.i.g. it has a domino effect. not only a.i.g. but other large insurers around the globe which have not been put into this current wave -- >> and you think it's right that they should? >> well, they're part of the financial system and if
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something happens to them, it affects us. that's what we're looking for, making sure that companies that make guarantees that affect other large institutions can't bring down the financial system. they're not too big to fail if they can't bring down the institution. what's -- the shareholders may be out but it won't bring down the financial system. what we're overfocused on, if a.i.g. got into trouble again, i am comfortable we can live up to all the promises made to, maybe not the shareholders or bondholders but to the clients. >> i'm curious because you have been able to bring this company out of the trough and under public scrutiny. you see all these activist investors, carl icahn, all the pressure they're putting on c.e.o.'s these days and you see this past week tim armstrong being lambasted for some comments he made in a town hall meeting, does it put more
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pressure on you or do you feel like you've got more eyes watching on you because there has been so much of this kind of news out on c.e.o.'s and they have to be so much more careful about what they say and they have these activist investors on their backs? >> you have to think about your shareholders. if you are doing the right thing for your shareholders, then the activists don't have an issue. if you are doing the right thing for your clients, the clients are happy and if you do the right thing for your shareholders, the shareholders will be happen make sure people work together so the client is getting world-class service and make sure you think about shareholder value and that you are running the company to the
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point that everyone is satisfied. it's a balancing act. if you become lopsided in any way and the shareholder is not geting a -- getting a fair return -- >> or a little careless even? >> you become careless when you don't listen to your people. i have a wonderful group of people. it's open season on bob some days. it's tough for c.e.o.'s to get open input from people. i work very hard on it and the team works hard to get good i putt. you shouldn't get yourself in trouble if you are listening to all the people around the organization. so yeah, run the company the right way and if you are not there is somebody overseeing what's going on, which is the market broadly, that will tell you there is something wrong with your company. >> thank you so much for stopping by this afternoon or this evening. bob benmosche. pimm, back to you. >> thanks very much, betty. coming up, travel disrupted in the south and along the eastern
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seaboard because of a winter storm. how will all those valentine's day flowers get to where they need to do? we talk to 1-800-flowers next.
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>> my next guest's company is going to sell more than seven million roses this week and more than 250,000 pounds of chocolate by valentine's day. founder and chief executive jim mccann is with me and he's the author of a new book entitled "talk is not cheap, the art of conversation leadership." jim, it's a pleasure. happy valentine's day. it seems like it's almost an annual event. let's start with the book first. why did you decide to write this book? >> i guess because i wrote a book 13, 14 years ago about the lessons i've learned in my two careers, first in social services and second as a florist
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and how what i learned working in a home for teenage boys applies to my day job now. it's a continuation of that conversation and i realize i don't have a formal business education but all the things i've learned through interesting interactions. certainly you teach people that every day in the terms of you are curious or learning all the time, that's why you are so good with guests. >> can you give us an example of something you have gleaned from your experience? give us an example of this conversation technique. >> i was listening before when the conversation on the show was about the minimum wage and a concern i have is you and i did similar things as kids, working in retail stores. that's how we learned about
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business, how we learned what people do. you're a sales guy? you call on these retailers? and my concern is as the minimum wage goes up, young people don't have the same opportunities to work as they used to. in fact it's almost out of fashion for people to work part-time or in the summers. so me it was a way to continue the dialogue and i'm looking for more conversations, interesting conversations. >> ok. let's talk about the storm, the winter weather that's battered the south as well as the eastern seaboard and the midwest. what's going on with the weather and how does that affect 1-800-flowers? >> well, it affects us. 2/3 of the country is fine and not impacted by bad weather, but certainly the east is. we've averaged i guess one storm every 10 years that effects us like this, so you can build that into your process. now i remember why in the summer we are taking drills. we named this operation love storm. we're prepared because we've practiced these drills -- >> you have the contingency plan? >> big time. >> flowers from location b to -- >> the good news is a lot of new yorkers and people on the east coast are not getting to the office so more people are saying deliver to the office. not sure if she's going to be
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at the office or can get in, so deliver to the home. >> that's if you have the flowers in place? where do they come from this year? >> your growing season depends on where the warmth is around the globe. right now places like california where flower production has been going down, it is going back up because it can be more efficient the colombia in south america is the biggest source of roses this time of year because they have the good climate -- but the flowers have been in place for a few days. so we're ahead of the storm. >> what's the biggest seller? >> right now a mixed bouquet. everyone likes roses but it's not just the red. a great variety available. >> and of course chocolate goes with it, too? >> i think it goes perfectly. >> i want to thank my guest, jim mccann, chairman and chief
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executive of and author of "talk is cheap." next up, you are going to meet the woman who is the chief executive of the amazon of russia. this is "taking stock." >> lots of attention focused on
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russia right now. of course the olympic games focused on sochi, russia. but i want to get some insight into the current state of business and high tech coming together in retail in russia. joining me is the chief
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executive of ozon, thecompany known as the of russia. thank you for being here. tell us something about the amazon of russia? >> do you want some big numbers? good we love big numbers. >> all right. the biggest e-commerce group in russia. we have 14 million customers, 3.5 million products that go from books all the way to toys to shoes. we also sell travel, hotels. so we're really a big group. >> all right. you're a very big group. how did you get to be the head of such a big organization? >> i got very lucky. like i've been traveling a lot. russia is my seventh country. i used to live in russia, i used to live in south africa. i lived in france, which is my home country. but i speak russian which i learned at school, and at some point i was working for an american company called b.c.g. and they discovered i speak
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russian and they sent me to russia and one of my last clients there was ozon and they made me an offer i really could not refuse. >> do you get to shop for anything on the web site? >> yes. absolutely everything. shoes, makeup, if you are a woman you will find everything you want. >> and what would people be surprised to learn that provides that make doesn't? does it provide local products or products specific to the russian audience? >> i think the biggest difference is we handle the delivery ourselves. amazon, once they ship it out of their warehouse, that's it. but we have our own delivery service which does nationwide delivery and cash collection because unlike amazon we do the majority of our business as cash on delivery. 75% of the transactions on ozon are cash on delivery.
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>> do you want to transit those paying by cash to using credit or more electronic means of payment? >> we're getting step by step to that point but it's not really a revolution, it's more an evolution. prepay payment by card was 10% when i started and now it is 15%. not a big change. >> who owns >> a lot of people. we're a private company. we have russian investors and almost american investors. among them are cisco, been with us for over seven years now and we have a japanese investor, the biggest e-commerce company in
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japan. >> what are some of the hottest items right now? what's the best-selling item? >> all the sochi-branded items are really selling very well. >> all the olympic branded stuff? >> yes. the russians are so proud of what's happening over there and they spent a lot of time and of course money to make it work and they want to show it to the world. >> i also notice there seems to be a big valentine's day presence on the web site. >> yes, there is. >> is that a well known and well attended holiday in russia? >> not as popular as what we call woman's day, 8 of march, which is a big thing. if you are a woman you want to be in russia on the 8th of march. >> 8th of march? all right. we'll look for that. thank you very much.
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it is 56 minutes past the hour. that means time for on the markets on bloomberg the the dow jones industrial average closed higher by 63. the nasdaq higher by 39. thanks for taking stock. i am pimm fox. good night. >> tonight on titans at the
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table. >> businessman turned environmental activist. he was born and raised in the financial capital of the u.s., new york city but chose to open his company in san francisco. he founded the company with $8 million, and by the time he stepped down he turned the initial investment into $30 billion, making it the
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fourth-largest hedge fund in the world. an estimated two point $6 million. not content with the golf course as anreinvented himself activist. >> each week we take a look at the keystone pipeline or postal. >> he believes the ling the canadianwill escalate oil. >> the question here was is this a chance to change our trajectory? is this a change to way -- the way to change the policy of energy? town inught up with his arkansas where he was looking at the oil spill.
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here is some just off the top of the water. it's sticky. it's extremely sticky. it smells awful. >> in march, 2013, a shallow underground pipeline owned by down the residential street as you see in this video. >> the smell is unbelievable. look, there is oil. >> the oil flowed down the street through a drainage ditch. the crews had come from alberta, canada, thousands of miles away. they for?e >> they are to soak in the oil. they are supposed to. they are supposed to soak in water.
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had come to mayflower together ammunition for what may be the biggest fight of his life, trying to stop the pipeline from being built. he worries more leaks like this one could happen. the proposed by blind would stretch from the canadian border across the u.s. to the existing pipeline that carries oil to the refinery. >> it is not going to the united states. nots going to be more oil from the middle east. that is true, but it just means there is more oil not from the middle east in the world market. >> we walked along the quiet street in mayflower that just a few months before had been cover it in oil. exxon mobil is facing a $2.6 million fine for the spill and -- spent$70 million $70 million to clean it up. three houses were so badly
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damaged exxon not them down. most sat empty. accident, this could be a long shot. if you look at the polls, two thirds of americans do support the keystone pipeline, and that number hasn't budged. it seems you are a minority. >> i think this is a topic in which people don't understand and it is always presented as we do this or we do nothing. that's absolutely not true. we are not going to run the society without energy. it's just how you think about it. >> he says the biggest issue is how oil is recovered from the canadian countryside. 20% of the oil is mixed in sandy soil lying just beneath the surface. in centrifuges to separate the oil from the dirt. 80% is trapped hundreds of feet
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below solid rock. steam is injected to loosen the oil. it must then be mixed with chemicals to make it flow to the pipeline. more touires 70% extract than traditional oil. >> this is a gigantic mining the middle of nowhere. they want to take production by 2025 and more than double it. >> your goal is to make sure that never comes out of the ground? >> from my point of view, i am not a scientist. the scientists say it would be for theingly terrible people of new york if it does. fore looks outside the box answers. >> i believe the solution to our energy problem is going to be corporate >> tom steyer claims money
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didn't motivate him, but he is incredibly good at making it. the company has a market value of $4 billion, and that has made him a very wealthy man. he didn't like using money as a benchmark. you still made a lot of it. how does that work? worse, i amr or competitive. >> his investment fund invests in investment companies, including kindern morgan, but diversify promised to and pledged to donate roughage to victims of western wildfires. now he says he looks to the oil and gas industry for answers.
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>> tell me how to take the incident that happened with the oil spill. how do you apply that to the work you are doing now against the keystone pipeline? back for one second. i actually believe the solution for our energy problems is going to be corporate america, is going to be private enterprise, that when we get the policy framework right, the people in that sphere will come up with creative, imaginative, innovative solutions that will blow our minds. if you really look at what is the fossil fuels arena, people are being really creative and innovative. some people hate fracking, but fracking is a new technology some people in the united states came up with is a way of engineering around an old problem. that's exactly what i expect american business to get. >> you are saying not all
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corporations are evil. in fact, it's ok to make money as long as it's toward a goal. >> i don't think corporations are evil. what i don't think we should do for ouron corporations morality. the truth is we are a nation of it,le, and i hate to say but the law of the land is the people who run corporations' responsibility is to take care of their stockholders, so that is a limited worldview in my opinion, and that's not the worldview that is going to get us to the broad answer for don'ty as a whole, so i actually feel resentful. i take that as a given, and when someone asks what is exxon's motivation, their motivation is the stockholders and the corporate network. make you feel you needed to do something about what was going on?
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had au feel you responsibility to do something? >> the truth is what we have been trying to do is get the human story out because that is what other americans can understand and relate to, something that would have some reverberation and impact. >> when we come back, using money to change politics. >> big things are happening thanks to president obama. laying the foundation for the way we power tomorrow. >> you have been the president of the corporation. >> i was, and i am.
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tom steyer >> billionaire has anated 65 million dollars to renewable energy center at yale and stanford, and he has entered
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into the political arena, spending $10 million to support initiatives and candidates. you have been effective in many of the initiatives you have call some of you those initiatives you have put money into some of the best investments you have ever made. are goingmething you to continue to do? >> i don't know that is what i am going to do forever, but i definitely will do that in 2014. >> tom is not the only outspoken liberal in the family. his brother jim teaches civil rights courses at stanford and founded common sense media, a nonprofit organization. the brothers have been compared to another set of closely minded siblings, the koch brothers, but they have spent hundreds of millions backing tea party candidates and conservative causes. know aboutactually
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them. i think there definitely has to be differences in the sense that those guys are doing something consistent with their self you know -- >> when you say self interest, what do you mean? >> they basically are pushing stuff that is very good for private enterprise, in specific, oil refinery. veryve very specifically, aggressively, and sometimes very intelligently. i see that as we are on very different trajectory in terms of how we think about it, who we think we are representing, and what we are trying to accomplish. >> but he does have an agenda that leans to the left. he spoke at the democratic convention of 2012. >> big things are happening. thanks to president obama is laying the foundation for the way we power tomorrow. >> he and his wife have given more than $11 million to super pack. they hosted a fundraiser with
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the president at their san francisco home. you have been a supporter of the president. >> i have. i am. >> initially, he was quite big on climate change, and he was quite forceful in talking about climate change. were you disappointed? >> i think the president's record through the epa in a regulatory fashion on climate is really good, and i think he really understands the issue. you wouldn't see today but 20 years from now it would be super obvious, and i think they have that perspective. >> do you have any ambition to run for office? >> i have always said i would do virtually anything to make our agenda come true, and that is true, but i have also tried to be clear that this is not an intelligent, strategic,
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well-thought-out, self-interested effort to promote myself. i have to say if there came a time when i thought that was really important to do, i wouldn't shy away from it because i felt i was going to get the be jesus kicked out of me. the candidatese i know. >> though he said he had no plans to run for office he stopped and have lunch with the victims of the oil spill while he was in arkansas, and he listened intently. >> what have you learned in your quest to get the pipeline? >> i spent all my time on the pipeline -- i haven't spent all my time on the pipeline. i spent some time on the pipeline. i think i have gotten a chance to be exposed to more parts of american society than i had been when i was exclusively a professional investor, so i met a bunch of people i would never have met, and i spent time with
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them. this isn't where you just say hello, how are you, and have 15 seconds, so selfishly, i think it has been really fun, and it has been very good for me. >> his anti-keystone campaign hit a bump in the road recently. in late january the state department released an environmental review saying the keystone pipeline is unlikely to end oil production. >> it is going to happen anyway. >> is that a good thing? no. there's no way that is a good thing. >> it would allow the president to say, i will go ahead and approve the keystone pipeline, and what happens to you? >> i will still get up in the morning and eat breakfast. i will feel as if a huge mistake has been made. approved, is there
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still fight here at all? if i don't know. i have had people talk to me about that, and they explain different ways you can fight. >> you don't want to look towards that point? i feelonestly don't. like we are committed to the idea of making the case right now that this makes no sense, and i think it is a chance for the president to be a global leader in a way that is incredibly relevant and incredibly historically significant. to me, i look at it like somebody is giving you on a platter this incredible opportunity, which entirely lines up with your understanding of the world and your understanding of who you want to be in the context of that world. why is that complicated? >> when we return, tom steyer's paradise. running this huge branch, how is it different from running a $20
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billion hedge fund?
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>> the northern california coast is one of the most picturesque places in the united states, so it is no wonder this is where the billionaire tom steyer ended up. there is an 18 acre ranch he and his wife bought in 2002. it is a world away. buying this ranch, was that your idea or your wife's idea? >> i think you can lay my wife. originally we bought it because of the land. you could dump stuff if you paid the fee.
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>> running this huge ranch, how $20t different from running billion hedge funds? >> i can tell you how it is the same and how it is incredibly different. it's the same in that you think it looks like an asset, but it is actually dramatically changed by the people who run it. that's exactly like every organization i have been in, which is having great people at the top. it is unbelievably significant and powerful, and that's where the comparison is. >> how many have you put into this? >> i try never to ask this question. we have put every building. raising grass fed cattle or something that would be a good thing to do and a fun thing to do. tomkat ranch has a staff of 15, including scientists
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studying economically friendly ways to raise cattle. >> you move the animal from place to place. you have big herds of animals that have moved across the plains of the earth. at this point what we would think of as real success is if it turned out scientifically we are right with the way we are raising the animals causes the land to soak up twice as much carbon as normal. always bucked against traditional wisdom. he and his wife decided to settle on the west coast near their alma mater stanford university. >> i chose to avoid new york city. really felt as if i was part of that community, even though i have a lot of friends you know they say the person that has the most toys
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when he dies wins. that's insane. why would that be true? starteder when i first i was talking to someone about an investment situation, and there was someone trying to take control of the company. that guy is an idiot. the person i was talking to said, he is worth a lot more money than you. i am thinking, am i dumber than everyone working for me? thannd i am not smarter everybody i am richer than. >> is that why you left wall street? >> i didn't think it would be a great place to have little kids, and if you like the great outdoors. it is hard to re-create. >> steyer tries to get out to his ranch a few times a week.
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in addition to raising grass fed cattle it plays host to local schoolchildren who come to visit dorothy, the 300 pound paid. >> the rule is don't name it if you want to eat it, but this really is the equivalent of a petting zoo. we could go inside. >> the kids come here. or they go inside. >> they do all that stuff. here comes dorothy. do you have an apple for her? we have an apple? >> no. that's what she's interested in, not us. seems to have moved comfortably from ceo to his new role as environmental caretaker, but it remains to be seen if his passion and deep pockets are enough to conquer keystone. >> i think my parents had a strong sense of participating in the community, which is all i
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really think i am doing. ♪ . .
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